In the stock market, shares of financial companies battered by mortgage losses have led the way down over the last year, and Thursday saw more of the same. An index of major financial stocks plunged 11%, with investors now focusing on the potential for losses to spread to commercial real estate loans and corporate loans as the economy worsens.
Shares of banking giant Citigroup Inc. tumbled 26% as some investors bet it would require a federal rescue -- even though it received a $25-billion capital infusion from the government in October.
Few stocks have been spared by the market's dive this year.
This week alone, shares of Berkshire Hathaway Inc., the holding company controlled by legendary investor Warren Buffett, have plummeted 23% to a five-year low.
Four weeks ago, Buffett wrote an opinion piece in the New York Times exhorting Americans to buy stocks, saying that "fears regarding the long-term prosperity of the nation's many sound companies make no sense."
Since the article was published, the Dow has dropped 15%.
Some analysts argue that the market's misery offers an extraordinary buying opportunity for long-term investors, if they have cash available. But that assertion has been made many times before in this bear market, and investors who jumped in have been punished by the relentless decline.
The mood is that "the stock market only has one direction now, and that's lower," Buechler said. "Why buy today if you can buy it cheaper tomorrow?"
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tom.petruno@latimes.com
walter.hamilton@latimes.com
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Automakers' door to aid is still open
Congressional leaders agree to reconsider the request but demand details on how the money would be used. BUSINESS, C1
